Qantas has reported a lower than expected full-year underlying loss before tax of $646 million, but booked a statutory loss of $2.8 billion as a result of hefty restructuring charges and writedowns to its fleet.

The airline has decided to hold on to its frequent flyer program, as expected, but will form a new holding company that will allow its international business to participate in future consolidation opportunities.

"There is no doubt today's numbers are confronting, but they represent the year that was past," Qantas chief executive Alan Joyce said.

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"We have now come through the worst. There is a clear and significant easing of both international and domestic capacity growth."

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Analysts had expected the airline to report an underlying pre-tax loss of about $750 million but had not expected the airline would take such heavy writedowns on its fleet.

Much of the underlying loss was contributed by a $253 million increase in fuel costs and capacity being added ahead of demand in both Qantas's international and domestic businesses, Mr Joyce said.

Mr Joyce said Qantas was expected to return to an underlying profit before tax in the first half of the financial year, subject to factors outside its control. The airline expects international capacity growth of 2.4 per cent in the first half and domestic growth of 1 per cent.

Qantas' cost savings, the lack of a carbon tax, steady fuel prices and reduced depreciation charges will help contribute to a better result in the first half, the airline said. Unit costs fell by 3 per cent last year, including 4 per cent in the second half.

As part of its structural review, Qantas has ruled out establishing any new Jetstar ventures while the company is focused on its transformation. However, the stalled Jetstar Hong Kong venture is still expected to proceed as planned, provided it can obtain regulatory approvals.

The possible sale of Qantas's Frequent Flyer program is now completely off the table after the structural review, Mr Joyce said.

"In relation to Qantas loyalty, it was a very complex and needed deep consideration. We have decided there was insufficient justification to do it. That decision is clear, we're not going to do it.

The airline will continue to target 5000 redundancies as part of its transformation process, but no more.

"5000 is what we're implementing, that's needed to turn the business around and any speculation that's been out there around this has been wrong, we are focused on the 5000," Mr Joyce said.

"So far it's been Qantas staff who have bore the brunt of the pain. It's time for senior management to take responsibility for this result," Ms McManus said.

"It's almost impossible to see how further cost cutting wouldn't compromise the service and safety standards of our national carrier."

Opposition Leader Bill Shorten pledged to keep flying Qantas and said he believed there was a future for the carrier.

"Hopefully there's been a line drawn under further job losses. We see that the changes which Labor led in the Parliament will provide Qantas with the opportunity to reinvest in its international arm," he said.

"So I believe that there is some silver lining in a difficult day for Qantas, and some positive prospects for blue sky in the future."

The result has stirred anger amongst Mr Joyce's opponents, but the chief executive said he would continue to ride through the tough times in order to bring Qantas back to profit.

Qantas has taken a $2.6 billion writedown to its international fleet, due to the historic cost of aircraft it had purchased at an average exchange rate from Australian dollars to US dollars of 68 US cents. Following the writedown, the carrying value of the fleet will be more reflective of the current market value, and depreciation charges will be reduced by $200 million a year, the company said.

There had been speculation for nearly a decade that Qantas' fleet was overvalued. The airline said on Thursday the writedowns were triggered by the decision to split its international business from the rest of the operations, because the asset values were then no longer shielded by the surpluses in other divisions.

Divisionally, Qantas Domestic reported underlying earnings before interest and tax of $30 million, down from $365 million a year earlier, as a result of the damaging capacity war with Virgin Australia Holdings.

Qantas International reported an EBIT loss of $497 million, compared with a loss of $246 million in the prior year. The Jetstar Group reported an EBIT loss of $116 million, down from a profit of $138 million a year earlier, but the Australian domestic portion of the business remain profitable.

The airline's highest earner, as expected, was its loyalty division, which reported EBIT of $286 million, up from $260 million in the prior year.

Qantas also announced some changes to its fleet. It has moved back the 50 options and purchase rights for its 787-9s to 2017 from 2016 in line with its transformation plan. It has also announced plans to sell two 737-800s this financial year and not to renew the leases on two of its Qantas Domestic A330s. It has also sold five A320s on order for Jetstar and plans to sell two QantasLink Q300s during the current financial year.